Bolivia may seek $800 m from Jindal Steel & Power

May 7, 2010: Jindal Steel & Power (JSPL)'s joint venture with the Bolivian government to develop the El Mutun iron ore deposit could collapse and the Indian company may have to pay a fine of $800 million, according to media reports.

ABI, the official Bolivian news agency, quoted mining minister Jose Pimentel as saying the damages include $600 million in investments which JSPL was supposed to make in the first three years of the commencement of the project and $200 million as expected revenue from the project in the period.

The agency, however, added that the government is trying to resolve the dispute so that the joint venture could continue. The company has on several occasions maintained that all the disagreements with the Bolivian government over the project have been settled.

JSPL had wanted to scale down steel plant plan, but the Bolivian government rejected the ides.
Reports suggest that the company wanted to slash steel production by 40 percent and iron ore mining by 20 percent from what was agreed as part of the multi-billion dollar contract.

Pimentel, in April, was quoted saying that JSPL should have invested some $600 million in two years, but they did not even hand in their investment plan.

Source: DNA Money